By MATTHEW HOLT
The new Supreme Court, in all likelihood including just nominated Justice Amy Coney Barrett, will be hearing the California v Texas suit against the ACA on November 10th, seven days after the election. The lower courts have already ruled the ACA unconstitutional. Some hopeful moderates among my Democratic friends seem to believe that the justices will show cool heads, and not throw out the ACA. But it’s worth remembering that in the NFIB vs. Sebelius decision which confirmed the legitimacy of most of the ACA back in 2011 all the conservative justices with the exception of John Roberts voted to overturn the whole thing. With Ginsburg being replaced by Barrett there’s no reason to suppose that she won’t join Thomas, Alito, Kavanagh & Gorsuch and that Robert’s vote won’t be enough to stop them this time. The betting odds must be that the whole of the ACA will be overturned.
There is nothing the Democrats can realistically do to prevent Barrett filling RBG’s seat on the court, but assuming Biden wins and the Democrats take back the Senate, the incoming Administration can give the Supremes something to think about regarding the ACA. I would not suggest this level of confrontation before the election but, if Biden wins, the gloves must come off.
Assuming he wins and that the Dems win the Senate, this is the speech Biden should give on November 9th. (The TL:DR spoiler is, “Keep the ACA or I’ll extend Medicare to all ages”)
“I’m directing this speech to an extremely select number of people, just the Supreme Court Justices appointed by Republican Presidents. It is obviously no secret that we have political differences on many issues and we find ourselves in the strange situation in which I am the incoming President with an incoming Democratic Senate majority and yet you are considering overturning the signature bill of the administration in which I was Vice-President. You may recall that at the time of its signing I told President Obama that it was a “big f****** deal” and, although many of my colleagues in the more progressive wing of the Democratic Party have criticized the ACA since its passage, it turns out that I was right.
I am not referring here to the apoplexy that the ACA created amongst the Republican Party including not only the current and outgoing President but also almost all Republican members of Congress between 2010 and 2018. Instead I’m referring to the ACA’s impact on the nation and its health care system.
Since 2010 there have been many changes to the way our nation’s health care system operates; almost all of them have their roots in the ACA.
First, the ACA gave access to health insurance coverage to many people who had great trouble getting it before. That includes young people moving between their parent’s home, college and getting into the workforce; small business owners; freelance workers; the unemployed; people with low incomes; and people with underlying “pre-existing” health conditions. I remind you that due both to the pandemic and changes in our economy, there are many, many more of these people now than there were in 2009.
Before the ACA these people were either not well served by the private health insurance industry or literally were unable to buy coverage at all. This not only caused extreme personal and financial suffering and in some cases death to the people affected, but also impacted the economy. It restrained innovation and entrepreneurship, and it meant that the participants in the health care system–including very many well meaning clinicians and provider organizations–had to play very inefficient games in order to try to provide those people with much-needed care, which drove up the cost of care to everyone else. Warren Buffet calls that the tapeworm in the US economy.
The ACA changed this in two main ways.
First it created a system of standardized insurance benefits and mandated insurers to provide those benefits to anybody regardless of health status. It also directly subsidized the cost of insurance for people of low to moderate-incomes. Given that median household income is around $63,000 in the US and the current cost of family insurance is around $28,000, these subsidies are essential. Otherwise people who do not have employment-based insurance would not be able to purchase coverage.
Second, the ACA expanded Medicaid coverage for the poor, creating a standardized set of benefits for those earning up to 133% of poverty. Sadly, the conservative majority on the court, joined (in my view to their everlasting shame) by Justices Breyer and Kagan, decided that the federal government did not have the right to force states to expand Medicaid even though the federal government paid 100% of the cost. It turned out that many states with Republican governors chose not to expand Medicaid, even though this meant that many rural hospitals in their states were forced to close. Numerous studies have shown that Medicaid expansion has improved the financial and emotional health of the poor, and other work has shown that the current Administration’s policy of allowing states to restrict access to Medicaid, by using such tricks as work requirements, have been cruel and counterproductive–and that they have not reduced health care costs or increased employment. States that have not expanded Medicaid have left their most vulnerable and poor populations in an extremely difficult state. For example in Texas a single parent with two children is only eligible for Medicaid if the children are on Medicaid and total household income doesn’t exceed $230 a month, which would barely cover your clerks’ daily lunch bill. Some estimates suggest that nearly three-quarters of a million people in Texas are in the coverage gap between Medicaid and qualifying for the ACA.
However, the ACA was not just about expanding insurance for those who had trouble getting it before. It also closed several loopholes that had confronted many other people who needed to use the health care system. This included closing the donut hole in the drug coverage for seniors provided by the Medicare Modernization Act in 2003. It also did away with maximum coverage benefits which severely compromised the care received by extremely sick people–often children or those with very rare diseases. And, in a great benefit to many, many young Americans from middle class and even wealthy families, the ACA allowed parents to keep their children on their insurance up until the age of 26, when they were usually established in the workforce.
Many of you on the Supreme Court believe that private delivery of insurance and health care services are superior to those delivered by the government. For you the ACA should indeed have been a very welcome piece of legislation. All of the new enrollment coming through the ACA exchanges went through private health insurance companies, and the vast majority of Medicaid expansion is also managed by private health insurers. While federal tax dollars are subsidizing this coverage expansion, it’s worth pointing out that a IRS decision in 1954 confirmed the tax-free status of private health insurance premiums paid by employers which translates to an annual subsidy to private employers that exceeds the cost of the premium subsidies in the ACA. On the night that the ACA was passed a Canadian journalist reported that America had just seen the largest expansion of private health care coverage ever–and he was right.
This coverage expansion was by no means all that the ACA did. It was also the legal and regulatory basis for a substantial modernization of the nation’s health care system. Of course since the 1930s, US health care has largely been based on a fee-for-service payment approach, acknowledged by experts to be both inefficient and inflationary. The ACA created the Center for Medicare and Medicaid Innovation which has been at the forefront of creating programs that encourage improved care at a lower cost by, for instance, bundling payments for joint surgery, cancer and other care. It also created the system of accountable care organizations which encourages doctors and hospitals to work together to more efficiently and effectively manage the health of large populations of Medicare recipients. And while the ACA did not create the Medicare Advantage program, it put in place an environment in which private health insurance companies were able to use government funding within the Medicare program to deliver innovative programs that are improving the quality of care received by our seniors.
In addition, since the passage of the ACA, and assisted by it and the HITECH Act passed in 2009, there has been a considerable boom in the development of new types of health care technologies, particularly digital technologies. These show amazing promise for delivering 24/7 care to many vulnerable populations. The significant spread of telehealth and remote patient monitoring during the current COVID-19 pandemic was only possible because of the innovation of numerous private companies. They developed those technologies in large part in response to incentives created by the ACA.
Finally, although the cost of health care in the United States is still significantly higher than it is in other countries, since the passage of the Affordable Care Act the rate of increase of health care cost has slowed and up until this year the health care system was barely growing as a share of the overall economy for the first time ever (other than a brief blip in the mid 1990s).
This is just a brief overview of the impact of the Affordable Care Act. It has directly meant access to health care coverage for around 20 to 30 million people and, as health futurist Ian Morrison points out, has tentacles impacting every single part of the health care system. This was not the case when four conservative justices including two currently on the bench (Alito & Thomas) voted to throw out the ACA in 2012. And it has not escaped my attention that the two justices who have replaced Scalia and Kennedy appear to have similar or perhaps even more conservative viewpoints.
If following the arguments you will hear this week, the Supreme Court decides to uphold the lower court hearing and abolish the entire ACA on what is pretty much a technicality, the consequences will be dramatic. And they will be very bad.
Tens of millions of people will lose their health insurance. Of course they will still require care. The cost of delivering that care will fall upon the nation’s health care providers, and eventually on the taxpayer. That cost will be distributed in an unplanned and chaotic manner –resulting in much actual and financial pain.
In addition, virtually every current organization funding, delivering or involved in care delivery will have to completely reformat the business operations it has spent the last decade putting in place. American health care will be thrown into chaos and the cost in both dollars and human suffering will be extreme.
Given the extreme impact of throwing out the ACA, I will appeal to all the justices to maintain the ACA in place.
Unlike the outgoing president, I respect the institutions and separation of powers inherent in the constitution of our nation. But given that I and my colleagues in the Senate have just been elected by a significant majority of Americans, and also given that none of the conservative justices on the court were appointed by a President who won the majority of the vote of his fellow citizens when initially elected, I would recommend that the court consider its actions very carefully. Unlike some in my party, I am not advocating significant constitutional changes such as appointing more justices, but the more the court bends against the arc of history, the more likely it is that such actions may be taken in the future.
However, in regards to the nation’s health care system I am hereby telling you exactly what I will do–should the court return a verdict overturning the ACA.
You are well aware that in the Democratic primary campaign, which was largely settled before the covid-19 pandemic had its full effect, my opponent Senator Sanders was campaigning to create Medicare for All. While I was and am opposed to this policy, it is clear that a significant majority of Democrats and in some polling a majority of Americans were in favor of expanding Medicare For All even before the full effect of the pandemic was realized.
The world of course is radically different now compared to how things were even at the start of 2020. Not only has our health care system had to deal with the onslaught of the pandemic, but the recession that it caused has placed many more millions of Americans out of work, and some 5 million of those have already lost their health insurance. I pledged in the election campaign both to get the economy moving and also to support those who were victims of the recession, which includes those millions who lost their health insurance.
In my campaign I pledged to build on the successes of the ACA. As you are well aware, two of the most significant policies I proposed were to create a public option and to reduce the eligibility age for Medicare to 60 years old. If the Supreme Court throws out the ACA, it will be by definition impossible for me to build on the ACA’s infrastructure.
But at a time of a pandemic during a recession I will not stand by and allow tens of millions of Americans to suffer.
Instead let me tell you what I will do.
As you know under the current rules of the Senate and from the convoluted passage of the ACA itself, it is virtually impossible to pass significant legislation without 60 votes. In the election that just happened we Democrats have retaken control of the Senate, but only with a slight majority. However, as you also know, the Senate can pass legislation impacting budgets under the process of reconciliation with a simple majority. You will recall that using reconciliation the Republican majority in the Senate tried to repeal the ACA in 2017, and were only prevented from doing so by the deciding vote of my friend the late Senator John McCain.
On the day which I hope never comes that the Supreme Court invalidates the ACA, my colleagues in the House and Senate will immediately introduce legislation amending Title 18 of the 1965 Social Security Act that created Medicare to reduce the age of eligibility not to 60 but to zero. At the same time we will amend title 19 of the 1965 Social Security Act that created Medicaid to reduce its budget to $0 other than to pay the premiums into Medicare for those known as “dual eligibles” and to pay for long term care and other services that Medicare currently doesn’t cover.
You and other conservatives might believe that we will not be able to complete this because of the Byrd Rule for reconciliation which was designed in the 1980s to ensure that reconciliation did not radically change the budget of the federal government. But the Senate Republican majority in the Congress before last essentially already violated these rules by passing a scandalously unfair and unfunded tax cut, and my colleagues in the Senate will be prepared to override the Byrd Rule. This, I point out, is significantly less controversial than overriding the filibuster or changing the number of justices on the Supreme Court.
Conservatives might also believe that Medicare expansion would significantly increase the budget of the federal government. This would be true but is ignoring two salient facts. The first is that the expansion to the federal budget would be something of the order of 2 trillion dollars a year, as the federal government already spends roughly 1.5 trillion of the 3.5 trillion the United States spends on health care. That level of expansion of government is somewhat similar to the deficit spending which just happened under the CARES act and other stimulus money spent during the current pandemic. So it’s not that large a leap for the country to make.
In addition while the expansion of Medicare under reconciliation would not directly abolish private health insurance in the manner that my colleague Senator Sanders has proposed, the fact that Medicare part A is free to Medicare recipients, and that parts B & D are very heavily subsidized, will mean that it is not only those who have lost their insurance or have trouble buying it in the individual market, or those who were previously on Medicaid, who will voluntarily enter the Medicare program. It is extremely likely that the vast majority of employers who are currently providing health insurance for their employees, which to be noted would be voluntary if there is no ACA, will cease to do that. After all their employees could now enter the Medicare program at no extra cost to them. While this will cost the government more, it will save employers and individuals an approximately equal amount and so the net effect on the economy will be limited.
Part of the reason that I am not a proponent of Medicare for all, has been that the change it would cause to employer-based health insurance, and to the finances of our nation’s health care system would be too extreme. It is worth noting that Rand recently showed that employer-based health insurance paid hospitals and doctors at nearly 250% the rate they receive from Medicare. There will certainly be high transition costs for the health care system from this move but everyone in the health care system already understands how Medicare works. My Administration will to work with providers and care delivery organizations to make sure that they are able to fulfill their mission of providing high-quality care to Americans.
Even though I have been a political centrist my entire life and have never been a proponent of Medicare For All–despite the fact that every other industrialized nation has something pretty similar to it–if you strike down the ACA I will act immediately. I would view the suffering of Americans as being too great not to respond. With no ACA in place there is no available legislative option other than this Medicare expansion.
I am well aware of the ideology of many on the political right in the US including most of the conservative justices on the Supreme Court. I would stress that this type of radical expansion of Medicare is not what I would ordinarily want to see. But if the ACA is abolished in the middle of a pandemic and a massive depression, my first duty to the American people as their President will be to relieve the suffering of as many of them as possible.
As you consider your judgement in the California v Texas case I would ask you not to put me in the position where I would have to take such a radical step.
But I assure you that if necessary I will have no hesitation in doing so.
Matthew Holt is the publisher of THCB. He has not written a speech for Joe Biden before but would happily lend him this one